If you're going to invest in mutual funds, it could pay to stick with not-for-profit management companies.

Reason: For-profit mutual fund companies often are more interested in their profits than in investor profits, says David Swensen, author of "Unconventional Success: A Fundamental Approach to Personal Investment (The Free Press)".

"The problem lies in the competition between a mutual fund company's fiduciary responsibility and that same company's profit motive," says Swensen, chief investment officer for Yale University. "The contest inevitably resolves in favor of the bottom line."

What is Swensen's solution?

Invest with not-for-profit fund management companies such as Vanguard and TIAA-CREF. The investment companies charge the lowest fees. They offer a wide range of investments that track the market averages.

Diversify your investments among stocks, bonds and other assets. But stick with index funds that track the market averages, such as the S&P 500 and the Wilshire 5000. The S&P 500 invests in the 500 largest, most profitable companies traded on the New York Stock Exchange. The Wilshire 5000 represents all large, medium and small company stocks. Over the long term, index funds have outperformed the majority of actively managed mutual funds.

Swensen does not entirely rule out investing in actively managed mutual funds. But he says you must do your investment homework to find the best ones. He favors the Longleaf Partners Fund, managed by Southeastern Asset Management. The fund manager, Mason Hawkins, has a good long-term track record. He invests in undervalued stocks for the long term. Employees and trustees of the company invest in the fund. The fund is low-cost and well- diversified. Over the past 10 years, the fund has grown at almost 14 percent annually.

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Alan Lavine and Gail Liberman are husband and wife columnist and authors of The Complete Idiot's Guide To Making Money With Mutual Funds, (Alpha Books). Al and Gail's new book is Rags to Retirement, (Alpha Books).